Israel concerned about gas discovery in Egypt

Israeli officials expressed concern that the discovery of an extensive gas field off the coast of Egypt could upend Israeli development of its energy resources.

The Italian energy company Eni SpA on Sunday announced the discovery of the largest gas field in the Mediterranean, threatening a deal between the Israeli government and developers that was based on expectations of substantial gas exports to Egypt. That deal already was bogged down in disagreements about regulation, pricing and profit-sharing that have delayed the start of production.

“The discovery of the Egyptian gas field is a painful reminder that while Israel has been asleep at the wheel and delaying final approval of the gas deal and additional exploration, the world is changing before our very eyes with implications for export possibilities,” Israel’s Energy Minister Yuval Steinitz said after Sunday’s announcement.

A senior Egyptian oil official said that while the gas discovery won’t affect negotiations to buy gas from Israel, final approval for any deal isn’t likely to come soon.

“It will be very hard now to convince the public of the need of the Israeli gas after the latest discovery,” he said.

That means Israel will have to look elsewhere for potential export markets, amid concerns that competition from Egypt could lower prices and profitability and damp incentive for the main developers of Leviathan, Texas-based Noble Energy and the Israeli Delek Group.